Key Learnings from Solar Asset Management North America

Over 400 solar professionals from across the industry convened at this year’s Solar Asset Management North America conference in San Francisco. Over the course of two days, professionals from across the solar spectrum convened to discuss the latest trends and innovations in operations, maintenance and asset management. This year’s event put an overwhelming emphasis on the distinction, but also the integration between the two sides. In light of the release of our new Asset Management solution, Mercatus partnered with Solarplaza as a sponsor of the event. Here are our main takeaways from the event:

Analyzing Data to Optimize Cost Structures

PV Monitoring, SCADA and other performance tracking systems are the standards when it comes to optimizing operations and maintenance. Now asset managers are recognizing the importance of connecting their performance data to the financial data of their operating assets. Throughout the conference there were discussions around the standardization of data, it’s management, and utilizing analytics to make informed decisions. Asset Managers now need to focus on how this translates into measuring uncertainty, mitigating risk and optimizing cost structures across the value chain; with one VP of Asset Management noting that “financial asset management is now a necessity.” The role of asset management solutions in this regard is now being seen in a new light as we look to optimize performance and minimize costs throughout the asset lifecycle.

Consolidating Large Portfolios in Today’s M&A Environment

It is becoming increasingly obvious that consolidation of the market is now happening on a massive scale. After a slew of major acquisitions over the past 12 months, project portfolios are transferring ownership much more frequently, with the market now cycling through every 5-10 years. This presents significant challenges and complexities in acquiring new portfolios, as lack of standard documentation, incomplete or missing asset history and forecasting and modeling do-overs all make the diligence and auditing processes extremely difficult and time-consuming. However, with more entities looking to scoop up readily available GW-scale portfolios in their quest to become large owners, often times critical information is overlooked. As more buyers look to distributed portfolios, the complexity and structure of the assets pose significant risks to their buyers if these standards and practices are not in place. Stabilized balance sheets, healthy project portfolios, and operational history are all considered in the auditing process, and those with the leanest cost structure and most stable balance sheet will be in the best position to receive their asking price.

The Future of Asset Management is Automated

New additions and acquisitions of large distributed portfolios are presenting significant challenges in asset management. When dealing with a large number of projects, having a standardized approach to agreements and procedures is essential. Many of these processes, which range from managing unruly excel sheets, tracking down multiple documents and scrubbing data to ensure accuracy are proving to be manually intensive, costly and error prone. These procedures need to be automated in a single system to ensure ease and accuracy of reporting, which is essential for not only meeting investor requirements, but also growing quickly, and efficiently. Now, asset managers are recognizing that the future of asset management lies in scalable, automated processes and workflows.

Looking at Asset Management Across the Entire Project Lifecycle

Further emphasis was put on the need for better communication between asset management and development teams. Since often times the assumptions made by developers are incorrect, having a consistent feedback loop and greater transparency between teams would ultimately help improve future performance and financial forecasts. As portfolios become more complex and more challenges arise in asset management, Mercatus VP of Product Management, Cathy Grossi, pointed out that asset management really needs to start at beginning stages of the asset investment lifecycle, well before its COD. This means that investments in technology need to happen sooner than later, as asset managers are waiting too long until they feel the pain of managing complex portfolios, proving that these systems should be in place before the onset of massive growth. Lapsing on warranties, defaulting on a PPAs and missing investor requirements are all serious risks if not monitored early on. As the current market environment shows and past financial woes have shown, these are not risks that the solar industry can afford to face in its efforts to become a mature asset class.

With so much talk around data collection, standardization and workflows, Grossi said, it ultimately bubbles down to improving the quality of the asset manager’s daily job. If the mundane tasks such as data crunching and reporting can be automated, asset managers will have more time to focus on what really matters such as optimizing technologies. Hopefully, when we reconvene at SAMNA next year, automation will be the standard, and there will be a greater focus on innovation and business model optimization.